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I am an intern heading into radiology. I'm 32 now and I have around 6 years of training left. I am currently on PAYE with $300k in student loans at 6.8%. My ideal job after after fellowship is one that qualifies for PSLF, but it's obviously way to early to know if I will be able get a job at my chosen institution when the time comes. If not, the odds of getting a PSLF qualifying job in radiology I'm assuming are pretty low.
I am also fortunate enough to have a spouse who will make at least double what I do for the foreseeable future. We live below our means and would not have a problem maxing out our 401k/403bs and two backdoor roths.
Option 1 is to max out our retirement accounts now and put any extra savings into a taxable side fund to lump sum a portion of my student loans if PSLF blows up.
Option 2 is to put a larger portion of savings in the side fund and partially fund our retirement accounts. This year I get a 3% match in my 403b, but the following years I don't know since I'll be moving to a new institution. Wife gets up to $1200 match per year, which is not guaranteed, and is not fully vested until 4 years of service (likelihood of her staying with the same company that long is relatively low, vesting increases by 25% each year). Since the taxable account would have a much shorter time horizon, the asset allocation would be a lot more conservative, and we'd be forced to put bonds in our taxable.
Option 3 is to forget retirement and put it all towards student loans since the interest rate is a ridiculous 6.8%.
Since I am a few years older than most interns, I'm inclined to take option 1 to get as much money in our retirement accounts as possible to let the miracle of compounding work. I don't like debt, and would normally pay it off as soon as possible, but with PSLF still on the table, it doesn't make much sense to me to be putting extra money toward the student loans at this point. Any other factors I should be considering? What is the best strategy to hit a net worth of zero as soon as possible?
Thanks for the help
Pierre
I am also fortunate enough to have a spouse who will make at least double what I do for the foreseeable future. We live below our means and would not have a problem maxing out our 401k/403bs and two backdoor roths.
Option 1 is to max out our retirement accounts now and put any extra savings into a taxable side fund to lump sum a portion of my student loans if PSLF blows up.
Option 2 is to put a larger portion of savings in the side fund and partially fund our retirement accounts. This year I get a 3% match in my 403b, but the following years I don't know since I'll be moving to a new institution. Wife gets up to $1200 match per year, which is not guaranteed, and is not fully vested until 4 years of service (likelihood of her staying with the same company that long is relatively low, vesting increases by 25% each year). Since the taxable account would have a much shorter time horizon, the asset allocation would be a lot more conservative, and we'd be forced to put bonds in our taxable.
Option 3 is to forget retirement and put it all towards student loans since the interest rate is a ridiculous 6.8%.
Since I am a few years older than most interns, I'm inclined to take option 1 to get as much money in our retirement accounts as possible to let the miracle of compounding work. I don't like debt, and would normally pay it off as soon as possible, but with PSLF still on the table, it doesn't make much sense to me to be putting extra money toward the student loans at this point. Any other factors I should be considering? What is the best strategy to hit a net worth of zero as soon as possible?
Thanks for the help
Pierre
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